The Intersection of Mission and Margin in Behavioral Healthcare

As behavioral healthcare has transformed from a nascent local patchwork of services to one of our country’s leading industries, many providers hold steadfast to their missions that have roots going back decades or longer.

The precursors of many of today’s healthcare providers were almshouses or sanitariums created by municipalities or religious orders. These institutions treated the infirm and indigent and were funded largely by benevolent organizations, local public coffers, and personal donations. Patients paid whatever and however they could for care.

Today, healthcare in the U.S. is a trillion-dollar industry. Behavioral healthcare, and the related human services sector is becoming less stigmatized and ever more important as we recover from the global COVID-19 pandemic. New, innovative access points are emerging and a continuum of care within the behavioral sector is developing. Private equity funding is revolutionizing providers’ strategies. Provider mega-mergers are announced with increasing frequency. All of this falls against a backdrop of unstable government- and employer-based health coverage policies, burdensome out-of-pocket costs for consumers and a complex regulatory environment.

So much has changed, but the main tenets of every provider’s mission have remained the same: ensure access to compassionate, quality care.

Yet, as any CEO will tell you, a modern charitable bent may earn a tax exemption, but it does not ensure the revenues necessary to keep a facility’s doors open. No margin, no mission. Without a functional organization, charitable endeavors are moot. The need to fulfill a provider’s altruistic mission must be reconciled with the need to successfully operate as a business in a complex and competitive industry. These drivers are not diametrically opposed; they are the reality of the American healthcare system.

Healthcare leaders are charged with preserving their institution’s mission by interpreting it with a contemporary lens and setting a course of action that will ensure their organization’s ability to serve its patients and stakeholders in the near- and long-term—from maximizing the deployment of resources to best serve the behavioral health needs of its community and operate efficiently, to cultivating mission as a staff motivator, to proactively identifying and filling gaps as access to care and population health indicators fluctuate.

Either out of strategic foresight or financial necessity, healthcare providers of all stripes are exploring partnership opportunities. A partnership can help an organization advance care quality, shore up administrative and clinical operations, and gain meaningful scale. Above all, the key area of alignment behavioral healthcare providers seek in a partner: mission.

In evaluating potential partnerships, leaders must assess the feasibility of continuing as a standalone in an industry that increasingly rewards scale and systemization, as well as benefits and drawbacks of joining a larger organization, taking a hard look at which outcome truly aligns best with their mission. The board and management team have a responsibility to routinely assess its mission and consider:

• Relevancy: Does the organization’s mission still reflect the needs of its communities? What unique role does it play in the regional health ecosystem?
• Fidelity: Is the organization true to its mission? How is it advancing its vision for its communities? Is the organization prioritizing independence over mission?
• Recognition: Is mission top of mind for leaders and staff in their day-to-day work? Do patients and stakeholders perceive the organization as a provider of quality, mission-driven care?
• Sustainability: Does the organization have the resources and expertise necessary to uphold its mission now and in the future? If not, what are possible alternatives to preserve its mission?

These questions should be discussed with full understanding of the organization’s financial and operational performance, competitive market (including looming market entrants), regulatory factors, and community health needs.

Behavioral health providers serve a unique role in their region’s healthcare landscape, providing critical services to improve lives and livelihoods. Leaders of these vital organizations must evaluate the underpinning of their mission, how it relates to their service to the community today, and take a mission-forward approach to strategic decision making to ensure long-lasting fiscal and philanthropic sustainability.

For more information about how behavioral health organizations are positioning themselves for the future, please contact Alex Voss at 312.506.3002 or [email protected].